Stockman\’s doomsday market scenario finds some detractors

So says David Stockman, ex-budget director for President Ronald Reagan. In a gone-viral op/ed piece for the New York Times on Sunday, the former Republican congressman from Michigan predicts that crash is a few years away and points the finger at easy Fed money flooding Wall Street and the weakening of the gold standard.

Stockman ends the four-screener NYT piece (at least from a PC), \”Sundown in America,\” with this cheery quote:

\”When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is.\”

But what are the market seers saying about this? Andrew Brenner, global head of international fixed income, had this to say in emailed comments:

\”While we agree that the Fed\’s easy policies are creating bubbles in multiple fixed-income products, we think Stockman\’s view for a collapse of the U.S. markets is too strong…remember, this is a guy who managed companies poorly in the mid 2000s, brought Collins and Aikman into bankruptcy…his record is mixed at best…\”

In two separate blogs on Sunday, Paul Krugman, New York Times columnist and Princeton University economist, first derided Stockman for his \”series of gee-whiz, context- and model-free numbers embedded in a rant — and not even an interesting rant.\” He called him a \”cranky old man,\” dogging Rush Limbaugh, and Zero Hedge (listen to their March 30 Stockman interview ) along the way.

In a second blog, Krugman tosses more water on the fiery Stockman piece by offering up a graph that shows that the U.S. really didn\’t have a deficit problem until 1980. Stockman asserts it\’s a long-running bipartisan issue.

Over on the Twittersphere, where the Stockman piece was locked in an endless loop of retweets, there was plenty of comment, a small portion of it going with the \”cranky\” theme:

Project for next week: write a living will to have my internet connection cut off by the kids when I get as cranky as David Stockman

But hey, more crankiness was not hard to find on a Monday. Bloomberg News reports that the stock market has moved so fast, analysts haven\’t had a chance to re-evaluate anything, and bears say stocks have gotten way ahead of themselves. Pimco\’s CEO El-Erian was also saying recently that markets are sending off unusual signals.

And stock futures? Down just a little on a quiet European morning after that blockbuster quarter that just wrapped up.

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